TMI Blog1976 (9) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... mt. Malti Sah and (13) Miss Sumitra Kumari, the appellants before us in parts a plot of land at Exhibition Road, Patna, bearing no. 567/401 (New) and 316 (old) Circle No. 6, Ward No. 2, Sheet No. 31, Plot No. 762 with building (hereinafter referred to as the disputed property) for an aggregate apparent consideration of Rs. 1,85,000 on 5th Sept., 1973. The information relating to the aforesaid transfers was furnished to the Competent Authority under s. 269 P of the said Act by the Registering Officer, Bombay, in form No. 37G. The information in possession of the Competent Authority revealed that the property transferred consisted of a plot of land measuring about 17.85 kathas located at one corner of the crossing of Dak Bungalow Road and Exhibition Road having a frontage about 111 ft. 6" towards Dak Bungalow Road and 151 ft. towards Exhibition Road. This disputed property was sub-divided into 10 small plots of varying sizes leaving a proposed common lane in between the plots. These small plots were transferred to the different parties through different deeds. The Competent Authority has pointed out that this area is one of the best commercial centres of Patna having a flourishing ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Authority found that in case of each transfer the fair market value of the property was more than Rs. 25,000 and that the fair market value of the property exceeded the apparent consideration not only by more than 15 per cent or 25 per cent but by more than 3 to 5 times in different cases and that the gap between the apparent consideration and the fair market value in each case was very wide. The Competent Authority held that the conditions precedent imposed by s. 269C(1) of the said Act fully applied to the transactions in question. 5. The next objection raised by the transferees was that the proceedings are illegal and void as the mandatory provisions of s. 269D (2) of the said Act were not complied with. The competent authority held that the facts of the case do not support this contention as the notices were duly published in the Gazette of India and were also served on the parties and affixed in accordance with the manner prescribed in the said Act. 6. The next contention made by the transferees as well as the transferors was that the property was purchased at the most fair market price considering various factors applicable to this case which very adversely affected the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer with the object as referred to in cl. (a) or cl. (b) of sub-s. (1) of s. 269c. 11. The Competent Authority held that the fair market value of the disputed property exceeds the apparent consideration therefore by more than 25 per cent of such apparent consideration and so in accordance with the provisions of s. 269C(a) of the said Act he treated it as conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer. The Competent Authority also held that as the disputed property was transferred for an apparent consideration which is less than its fair market value, in view of the provisions of s. 269C(a) and (b) of the said Act, he presumed that this consideration for such transfer as agreed to between the parties was not truly stated in the instrument of transfer with such object as is referred to in cl. (a) or (b) of s. 269C. The Competent Authority, therefore, after obtaining the approval of the Commissioner of Income Tax, Bihar-I, Patna, as required by s. 269F, (6) (c) of the said Act passed the order for acquisition of the disputed property under Chapter XXA of the said Act. 12. Being ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Jan., March, 1974 and April-June, 1974. We find the notification under s. 269D(1) of the said Act at page 1045 of the Gazette of India dt. 2nd March, 1974 in Part-III, s.I which relates to the sale deed of Sardar Bahadur Singh, Appellant. The Gazette notification relating to the other transferees are to be found in Part-III s. I of the Gazette of India dt. 1st June, 1974 at pages 3452 which is in English and at pages 3397 to 3404 which is in Hindi. 15. The learned Counsel for the appellants has pointed out that in the Gazette of India notification dt. 2nd March,1974 relating to Sardar Bahadur Singh which is at page 1045 there are mistakes relating to the transferors as the name of only Sri Vijay Kumar and Smt. Urmila Devi have been mentioned although the other transferors are Sri Sanjay Kumar and Sri Vinay Kumar who are minor sons of Sri Vijay Kumar. The copy of the sale deed executed in favour of Sardar Bahadur Singh is on the record which was executed by Sri Vijay Kumar, son of Sri Newas Ram, Smt. Urmila Devi, wife of Sri Vijay Kumar and Sanjay Kumar and Sri Vinay Kumar were minors who, executed the sale deed through Vijay kumar, their father and natural guardian. thus, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, we find that there is no mistake in the notification at page 3456. 20. The learned Counsel for the appellants has also referred to the notification at page 3457 relating to the sale deed in favour of Sri Kusheshwar Jha and Sri Vinod Kumar Mishra. In this case instead of Vinay Kumar son of Vijay Kumar it is printed as Vijay Kumar, son of Vijay Kumar. Thus, the mistake is there. 21. The learned Counsel for the appellants has also referred to the notification at page 3458 and he has pointed out that in this notification relating to the transferors the percentage of Sanjay Kumar and Vinay kumar has not been mentioned. We find that this defect is there. 22. The learned Counsel for the appellants has also referred to the notification at page 3480 relating to the transfer in favour of Smt. Jogendra Kaur. He has pointed out that in this case Smt. Jogendra Kaur is the transferee, but she has been shown as transferor and in the transferees Sri Vijay Kumar has been shown as son of Late Niwar Ram instead of Newas Ram and Sanjay Kumar and Vinay Kumar have been shown as sons of Vipay Kumar instead of Vijay Kumar and the transferors have been shown as transferees. We have perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notifications under s. 4 is to carry on a preliminary investigations with a view to finding out after necessary survey and taking of levels, and, if necessary, digging or boring into the sub-soil whether the land was adapted for the purpose for which it was sought to be acquired and that it is only under s. 6 that a firm declaration has to be made by Government that land with proper description and area so as to be identifiable is needed for a public purpose or for a company and that what was a mere proposal for acquisition under s.4 becomes the subject matter of a definite proceeding for acquisition under the Land Acquisition Act 1894. Their Lordships held that a defect in the notification under s. 4 is not fatal to the validity of the proceedings, particularly when the acquisition is for a company and the purpose has to be investigated under s. 5A or s. 40 necessarily after the notification under s. 4. The learned counsel for the appellants has submitted that in this case only the defect in the notification under s.4 was held not to be fatal to the validity of the proceedings and that this ruling does not refer to the notification under s. 6 of the Act when a firm declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also relied on the ruling reports in A.I.R.1970 Supreme Court at page 1188. From this ruling also it is evident that defects in the notifications under ss. 4 and 6 will not invalidate the proceedings. 28. We have pointed out the defects in the Gazette notifications which go to show that the mistakes are minor mistakes of printing and that only in the case of Smt. Jogindra Kaur she was shown as transferor instead of transferee. However, Sri Rajgarhia arguedthat when the original notice were sent for publication in the Gazette, the copies of those notifications were also sent to the transferors and the transferee and that there were not mistakes in the original notices and that the mistakes have taken place only in the Gazette notifications. This point was never challenged by the learned counsel for the appellants. Thus, we have to hold that the notices which were issued to the transferees and the transferors were correct notice giving correct details, but the mistakes have occurred in the Gazette notifications and thus the parties knew the correct state of affairs. Under such circumstances, we hold that the appellants were not prejudiced or misled by the Gazette notifications. Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defects in the notifications which clearly goes to established that the proceedings had been initiated on the basis of the notices issued to them and which were published in the Gazette of India. Thus, we have to hold that the appellants were not prejudiced or misled by the notifications in the Gazette of India. 31. Sri B.P.Rajgarhia submitted that in two of the notifications the transferors have been shown as Vijay Kumar and Smt. Urmila Devi, But it cannot be doubted that Sri Vijay Kumar executed the sale deed on behalf his minor sons Sanjay Kumar and Vinay Kumarand so although the minors were not described in two of the notifications that cannot be a ground to hold that the notification were invalid. 32. Sri B.P.Rajgarhia relied on the case of Ram Pyari Devi saraogi vs. Commissioner of Income Tax, West Bengal others (1) where their Lordships of the Supreme Court have held that the assessee had not in any way suffered from the failure of the Commissioner to indicate the results of the enquires the assessee would have full opportunity of showing to the Income-tax Officer whether the income assessed in the assessment orders which were originally passed was correct or not. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority and so the portions transferred to these two ladies cannot be acquired by the Competent Authority. We also find from the valuation report of the Executive Engineer (Valuation cell) of the IAC, Acquisition, Patna, that he also found this defect and he has pointed out that no reference was made to the Competent Authority by the Registration office relating to transferees Miss. Sumitra Kumari and Smt. Malti Sah. As the registrations amount was less than Rs. 10,000. But according to the valuation of the above plots comes to Rs. 27,500 each and so he suggested that necessary notices under s.269D may be served against these two transferees, if necessary. From the orders of the Competent Authority, it appears that the report was received on 11th Jan., 1974. However, in spite of it no action under s. 269D appears to have been taken against these two ladies. Hence, we hold that the plots sold to them separately by two sale deeds cannot be acquired as no valid initiations of proceeding took place against these two ladies. 36. The next argument which was advanced by the learned counsel for the appellants was to the effect that the notice was served against the appellants before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to clothe himself with jurisdiction thereunder. He contended that strict compliance of the provisions of the section is necessary to acquire jurisdiction thereunder. It was argued on behalf of the appellants that sub-s. (1) s. 269D provides for publication of a notice in the Official Gazette and sub-s. (2) provides for services of notice published under s.(1) on the transfer, transferee, etc. According the learned counsel for the appellants the publications of the notice under sub-s. (1) must necessarily proceed the service of the notice under sub-s. (2) as there can be no question of serving notice under sub-s. (2) so long as there does not exist a notice under sub-s. (1) published in official Gazette. The learned counsel for the Appellants argued that so long as a notice is not published in accordance with the provisions of sub-s. (1), the question of serving such a notice, which law does not exist, cannot simply arise. He further, contended that the procedure laid down in the section cannot be reversed and the premature service of notice under sub-s. (2), which is ab initio viod, cannot become valid on the subsequent publication of the notice under-sub-s. (1). He submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Act was complied with. He has also submitted that as regards cl. (d) aforesaid the appellants cannot take a vague plea at the time of argument when no such plea was taken in the grounds of appeal. We hold that the publication as required under cl.(b) of s. 269D(2) was complied with and the learned counsel for the appellant is not entitled to take a vague plea at this stage when no such plea was taken earlier before the Competent Authority. 42. The learned counsel for the appellant has relied on the consolidated order dt. 2nd Dec.,1974 of the Income-tax Appellate Tribunal, Bombay Bench D in I.T.A. Nos. 231 to 235 (Bom) of 1974-75. The learned Members of the aforesaid Tribunal have discussed this issue in paras 11 to 14 of the order which is to be found at pages 92 to 99 of the paper book. The learned Member of the Bombay Bench held that as sub-s.(2) provides for services of a notice under sub-s.(1) of s. 269D of the said Act, it necessarily follows that the service must be after publication of the Official Gazette and that the notice does not come into existence in the eye of law and there cannot therefore, be any question of serving a notice which does not exist and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the publications can be done simultaneously. For this purpose he has relied on the ruling reported in A.I.R 1962 Supreme Court at page 151 where there Lordships of the Supreme Court have held that a notification under sub.s.(1) of s.4 of the land Acquisition Act, 1894 in condition precedent to the making of notification under subs-s (1) of s.6 and that if the Govt takes a decision to make such a notification and thereafter takes two further decisions that is to dispense dispute which compliance with the provisions of s.5A and also to declare that the land comprised in the notification is in fact needed for a public purpose there is no departure from any provision of the law even though the two notifications are published on the same day. Their Lordships held that the preliminary declaration as well as the subsequent declarations are both required by law to be published in the official Gazette. But the law does not make the prior publications of notifications under sub-s.(1) of s. 4a condition precedent to the publication of a notification under sub-s.(1) of s.6 and that where s.5A is not in the way there is no irregularity in publishing those notification on the same day. 44. Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons who clearly have an interest in the property, the transferor, transferee, and the person in occupation and (b) on persons who, to the knowledge of the Competent Authority, are interest in the property; (iii) Publication of the notice on the notice board or other conspicuous place in the office; (iv) Publication of the notice by affixture of the notice on a conspicuous part of the property; (v) Publication of the substance of notice in the prescribed manner at convenient place in the locality. It has been pointed out in this order that every one of these modes of publication of intention to acquire is compulsory. The learned Vice President considered the question whether the statute contained a mandatory requirement that publication in the Official Gazette should come first and that, only after there is an actual publication in the Gazette, can further steps be validly taken. The learned vice president for the detailed reasons mentioned in the order came to a finding that the statute does not require that notice under s. 269D (2) must be issued only after the publications of the notice under s.269D (1) in the Gazette and that the mandatory requirements of the sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause replies dt.1st Dec.,1973 which was received in the office of the competent Authority on 10th Dec.,1973. It was after this that the Competent Authority recorded his satisfaction on 31st Jan.,1974 and thereon 31st Jan.,1974 he ordered for issue of notices in English and Hindi for publication in the Gazette of India under s.269D(1)of the said Act. It appears that the copies of the notices were also forwarded to the transferors, transferees and the lady who was in possession of the building of the disputed property and then by order dt.18th April, 74 the case was ordered to be fixed on 2nd May, 74 for hearing and then on 2nd May, 74 Sri S.N. Khetan, Advocate, appeared for the transferees and transferees with written statement and he was heard and then by order dt.29th Aug., 74 Sri Khetan was ordered to be furnished with a copy of the Valuation Officer s report and the case was fixed on 16th Sept., 74 for hearing and then it was adjourned to 26th Sept.,74 on which date Sri S.N.Khetan, Advocate, appeared on behalf of the transferors and the transferees with written reply. This will be evident from the copy of the order sheet which has been filed by Sri B.P.Rajgarhia. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dl. Subordinate Judge, Patna and the entire disputed holding was in the possession of a tenant since more than 25 years on a meagre monthly rent of Rs. 116 and this return was uneconomic. The entire disputed holding was under Patna Development Expansion Scheme resulting in the reduction of the area of the holding by about 10 per cent.The purchasers could not receive vacant physical possession of the properties or any part thereof. Even the written objections filed on behalf of the transferees before the Competent Authority by Sri.S.N.Khetan were also to the same effect. The transferees also pleaded that there was no basis for the assumption that the fair market value of any of the properties exceeded the consideration thereof by more than 15 per cent of such consideration. The transferees also contended that the properties in question were purchased on the most fair market price considering the nature of the encumbrance conditions, Govt. s future planning and other aspects of the property and under the prevailing situation and present position of the property it could not have fetched a higher price. It was pointed out that the properties in question were parts of a big plot of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted the Competent Authority for a copy of the Departmental Valuation Officer which was furnished to him and then on 26th Sept., 1974 Sri Khetan on behalf of the transferees and the transferors appeared and filed a common written reply and he also furnished a valuation report from an approved and registered valuer, namely, Sri A.K.Mitra. In this written reply it was contended that the method of valuation adopted by the Valuation Officer of the Department was most unscientific and did not give a correct assessment of the property. It was pleaded that the Valuation Officer overlooked the fact that the entire plot was purchased by different persons of different castes and of different religions and trade and it was wrong to imagine a hypothetical plan treating the property as a single unit. It was also pleaded before the Competent Authority that the valuation of land at Rs. 36,000 per katha had no bearing with the reality as construction of a multi-storeyed building may take at least 10years an so the ultimate cost of the property was not determinable at this stage. It was also submitted that in determining the price of the land all relevant factors should be considered. It was also s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. However the sale deed executed by Smt. Champa Devi and her family members in favour of Sri.S. Mehta is to be found in the file of the Competent Authority relating to Sri S.J. Mehta. As regards Smt. Malti Sah, the learned counsel for the appellants has filed the sale deed executed by Sri Vijay Kumar and his family members. However, the sale deed executed by Smt. Champa Devi and her family member is to be found in the file of the Competent Authority relating to Smt. Lalita Todi. As regards Miss Sumitra Kumari and Sardar Harbhajan Singh, the learned counsel for the appellants has filed only the sale deed executed by Smt.Champa Devi and her family members. The sale deeds executed by Sri Vijay Kumar and his family members relating to Miss. Sumitra Kumari Sardar Harbhajan Singh are not to be found even in the files of the Competent Authority. However, it is conceded by both the parties that both the sets of vendors have executed the sale deeds in favour of each set of transferees It is also conceded by both the parties that another sale deed was executed jointly in favour of all the 12 transferees. This will be evident from page 33 of the paper book filed by the learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . . . 2,71,111 22351 fq. ft . . Value paid under joint sale deed for the material of damage home . 15,000 . . . . Total 2,86,111 . 52. From the aforesaid details it is evident that all the transferees paid Rs. 15,000 under the joint sale deed for the material for damaged house. Actually we find from the Gazette notification dt.1st June, 74 at page 3458 that 300 sqr. mtrs. were transferred to all the 13 transferees who are the appellants before us out of the disputed property. Unfortunately, that sale deed has not been filed before us either by the learned counsel for the appellants or by Sri Rajgarhia for the Department. 53. The learned counsel for the appellants has filed a copy of the petition dt.1st Nov., 73 filed on behalf of Sri Kusheshwar Jha and Binod Kumar Mishra which shows that before the competent Authority they took the plea as mentioned by the Competent authority. This copy of the petition is at pages 25 to 30 of the paper book. In this petition in para 4 it has been clearly mentioned that all the 13 appellants purchased the property from Vij ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be determined on the date of registration as under s.269A(f)of the said Act instrument of transfer means the instrument of transfer registered under the Registration Act. Under s.269c of the said Act action can be taken only when in the instrument of transfer the fair market value is not stated and there is difference to the extent laid down in the section. 56. The Competent Authority referred the matter to the Valuation Officer. The Valuation Officer who is the Executive Engineer (Valuation Cell)of the IAC, Acquisition, Patna, submitted a report relating to the valuation of the disputed property. This report is to be found in Income Tax (Acquisition)appeal No.2(Pat)of 1974-75 at pages 2 to 30.The Valuation Officer has clearly mentioned the location of the disputed property measuring 17.5 Kathas which is located at one corner of the crossing of Dak Bungalow Road and Exhibition Road having a frontage of 111 ft.6" towards Dak Bungalow Road and 151 ft. towards Exhibition Road. He has also pointed out that this entire plot has been sub-divided in 10 small plots of verying sizes leaving a proposed common lane in between the plots. He has also mentioned that these small plots hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development method. He estimated the fair market value of all the 10 plots at Rs. 6,58,000 which is more by Rs. 12,000.If it is considered as one plot. The Competent Authority has given the valuation of each plot separately relating to the sale deeds which were executed separately in favour of each of the appellants and has thus valued the property at Rs. 6,58,003. However, we have already held above that the properties transferred to Smt. Malti Sah and Miss Sumitra Kumari shown in plot N.G/H valued by the Valuation Officer at Rs. 27,500 each cannot be taken into consideration as the proceedings have not been validly initiated against them and so the value of the other transfers will come to Rs. 6,03,000. 57. On the other hand, learned counsel for the appellants has filed the report of their approved valuer Sri Mitra which is at pages 21 to 24 of the paper book of the assessee. He has estimated the value of the land at Rs. 3,83,740.He has also pointed out that the building on the disputed plot i sin good normal condition. He has described the position of the building and has held that considering the depreciated value the market value of the disputed properties on 30th June,73 wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at a rate of Rs. 36,300 per katha on the basis of consideration of some sale proceeds for land on S.P. Verma Road and in other places at Patna in earlier parts of 1974 which plots enjoyed lesser potential than the disputed property. The Valuation Office has shown this in Annexure K of his report which shows that lands at Fraser Road and S.P.Verma Road have been sold near about that rate. He has referred to items 2,4,6,11,12 and 13 in Annexure K which gives an idea what should be the reasonable price of land at corner of Exhibition Road and New Dak Bungalow Road in Sept.,1973 as in this area heavy commercial business like tractor, motor vehicles, spare parts of automobiles shop have come up and still coming up along with both sides of Exhibition Road. He has shown the fair market value of the various plots purchased by the various appellants in Annexure G which comes to Rs. 6,58,000. He has given cogent reason for calculating the value at Rs. 36,300 per kathas. The Valuation Officer has considered the valuation according to the "Development Method" He has shown in Annexure A the area of each plot as shown in each sale deed. He has pointed out that 0.15 per cent less area ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atna published in the year 1967 and that as it will entail much money as a compensation for existing commercial buildings which have already grown up in 1975 along new Dak Bungalow Road and so there is very remote possibility for expansion of road to an extent of 63 ft. Due to economic and much litigation stringencies. He has also pointed out that he learnt from the Patna Development Authority that acquisition notices are only served on the owners of the properties and the owners of temporary shops on both sides of R.K. Bhattacharjee Road for widening to an extent of 63 ft. from the present 15 to 16 ft. wide road. The Valuation Officer, therefore held that within the next 20 years the plan of widening of road to an extent of 63 ft. will not materialise and that the present width of about 40ft. Is functioning for the traffic conveniently. However, the Valuation Officer took the worse possible case that acquisition threat is there. He calculated the threat only to an extent of 1.987 kathas, the details of which has been given in Annexure D and he also calculated the area of the common road at 1.42 kathas and thus the total area works out to 3.407 kathas which is only 19 per cent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the proper method adopted by the approved valuer. He has pointed out that the approved valuer worked out the value at Rs. 2,41,000 on 31st Dec.,72 but the fair market value has to be considered on 5th Sept.,73, the date of registration of the sale deeds in question. The Valuation Officer has pointed out that the cost of land in Dec.,1972 was less than in Sept.,1973 when prices of all articles had gone up by about not less than 100 per cent and in case of land by about 200 per cent He, therefore, held that the valuation of Rs. 2,41,000 taken by the approved valuer was not acceptable. The Valuation Officer has given a map in which the various plots have been demarcated as sold to various parties. Thus, the Valuation Officer in his report dt.17th Feb., 76 has given cogent reasons for supporting the valuation given by him and showing that the valuation of the approved valuer cannot be accepted. The Valuation Officer has cited various authorities in Annexure M to show that the hypothetical building schemes are the usual basis of valuation in the case of building land. We have to accept the valuation report of the Valuation Officer under such circumstances. The Competent Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty. They also asserted that the property was not affected by any encumbrance. The transferors also held themselves liable to pay back the consideration money with interest and also damages if some defect was found in their title. The competent Authority took the view that in view of this position, there was no question of defective title the risk of loss of the area. The transferees also pleaded before the Competent Authority that a title suit was pending between the transferors. The Competent Authority took the view that the very fact that the transferors did not mention it in the deed of sale indicates that it was of no significance. He also took the view that the subsequent payment of Rs. 1,01,000 to the transferors Champa Devi and others was voluntary and reimbursable from the first set of vendors according to the terms of the deed. He also took the view that the assessment title disputed did not come into consideration at all at the time of the registration of the sale deeds executed by the first set of vendors and was not expected to adversely affect the price of the property. 62. The Competent Authority also discussed the claim of the appellants relating to the threat of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his practice has become so widespread that hardly any registered document can be accepted as reliable evidence of fair market value of property in a particular area. Sri Rajgarhia also relied on the observations in the aforesaid ruling. The Competent Authority has given various details to show that the price as fixed by the Valuation Officer is reasonable. The following details will show the valuation relating to various transactions in 1974. Sl.No Name of Registra-tion Office Date of registration Deed No. Particulars of property Apparent considera-tion Price per katha 1. Patna 15th April, 74 4263 1463 sq.ft. land at S.P.Verma Road,Patna 20,000 19,000 2. -do- 17th April, 74 4736 1640 sq.ft. of land at Fraser Rd.,Patna 42,000 35,000 3. Patna 15th April, 74 4164 3.74 Decimal land at Pendarak 42,000 30,000 4. -do- 20th April, 74 4579 1640 sq.ft.of land at Fraser Rd.,Patna 42,000 35,300 5. -do- 3rd June, 74 7152 2 katha 16 dhur 5 dh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and out of this he made various deductions and then the total value of the property came to Rs. 2,40,814.The Competent Authority took the view that the valuation of land at the rate of Rs. 26,648 is very low. The approved valuer Sri Mitra deducted Rs. 1,38,875 for interest which the Competent Authority held to be uncalled for. The approved valuer himself pointed out that Rent Control Act permits eviction of tenants when the premises are required for personal use and so the transferees could evict the tenant easily. The Competent Authority took the view that the following data given by the valuer gives better idea of the value of the property:- Value of land Rs.4,26, 377 Value of construction Rs.1,26,054 Total Rs.5,52, 431 The Competent Authority took the view that the deduction made by Sri Mitra are unwarranted and the resultant intentionally deflated figure does not give an accurate idea of the value of the property. He, therefore, took the view that the valuation at Rs. 6,58,000 given by the Valuation Officer is correct. 67. The Competent Authority also considered the contentions of the appellants that the High Courts have h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Valuation Officer. The learned counsel for the appellants has repeated the same arguments before us that the vendors were residing at Bombay and there was litigation between the two sets of vendors and so the property was sold and fair price was paid. The learned counsel for the appellants has also submitted that the valuation should be made on proper basis taking into consideration the comparable cases and that the market value has to be considered on the date of sale and that the Valuation Officer was not correct in valuing the disputed property as if multi-storeyed building will be constructed. He has also submitted that the value should not have been considered taking the plot as one as it was sold to different persons. We have already pointed out above the reasons given by the Valuation Officer for adopting the development method. The Valuation Officer has also considered the comparable cases of sale and on that basis also he has held that the property cannot be valued at less than Rs. 6,58,000. 69. Sri Rajgarhia for the Department has submitted that the valuation of the property has to be considered keeping into view the location of the disputed property. He has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference to the price which a seller might reasonably expect to obtain from a willing purchaser, But as this may not be possible to ascertain with any amount of precision, the authority charged with the duty to award compensation is bound to make an estimate judged by an objective standard and the land acquired has to be valued not only with reference to its condition at the time of the declaration under s.4 of the Act but its potential value also must be taken into account. Their Lordships have also pointed out that the sale deeds of the lands situated in the vicinity and the comparable benefits and advantages which they have furnished a rough and ready method of computing the market value, but this is not the only method. They have also held that the rent which an owner was actually receiving at the relevant point of time or the rent which the neighbouring lands of similar nature are fetching can be taken into account by capitalising the rent which according to the present prevailing rate of interest is 20 times the annual rent. Their Lordships have also pointed out that there are various methods of valuation to be adopted in ascertaining the market value of the land which are (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputed property. The Competent Authority considered various circumstances and then came to a finding that the valuation of Rs. 6,58,000 as given by the Valuation Officer is correct. We agree with the finding of the Competent Authority on this point and we hold that the value of the disputed property is Rs. 6,56,000 Even if we held that the transferees have paid Rs. 2,86,111 for the entire disputed property by the various sale deeds executed by the two sets of vendors, even then we have to hold that the fair market value of the disputed property is more than 25 per cent of the apparent consideration paid by the appellants who are the transferees relating to the disputed property. We, therefore, hold that the Competent Authority was justified in initiating proceeding for acquisition of the disputed property. 72. s.269C (1)of the said Act lays down that (1) where the Competent Authority has reason to believe that any immovable property of a fair market value exceeding twenty five thousand rupees has been transferred by a person to another person for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Act in respect of any income arising from the transfer or with the object of facilitating to concealment of any moneys or other assets as provided in cl. (b) of sub-s.(1) of s.269C.The learned counsel for the appellants has submitted that the Competent Authority cannot take action merely because the valuation in the sale deed is low. The Competent Authority can initiate proceeding for acquisition when he comes to a definite finding that the transfer is with the object as provided in cls.(a) and (b) of s.269C(1) of the said Act and if the sale deed is executed not with the object as mentioned in cls.(a) and (b), then the acquisition proceedings cannot be initiated. He has also submitted that under s.269C(2)(a)of the said Act where the fair market value of such property exceeds the apparent consideration therefor by more than 25 percent of such apparent consideration, it shall be conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer. He has also submitted that if the intention in the execution of the sale deed is mala fide if the trick to avoid tax, acquisition, proceeding is pass, but if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 76. On the other hand, Sri Rajgarhia for the Department has submitted that the Competent Authority has given reasons for coming to his finding. He has also submitted that the Competent Authority has come to a clear finding that the sale deed was for a consideration of Rs. 1,85,000 that the value of the disputed property is at Rs. 6,58,000. He therefore, submitted that the fair market value of the disputed property exceeds the apparent consideration thereof by more than 25 per cent of such apparent consideration and so under s.269C(2) (a) of the said Act it shall be conclusive proof ;that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer. It cannot be doubted that this contention of Sri Rajgarhia is correct. We have also held above that valuation of the disputed property is Rs. 6,58,000 which has been sold to the transferees for Rs. 1,85,000. Even if we hold that the transferees appellants have purchased the entire disputed property for Rs. 2,86,111, Even then s.269C(c)(a) of the said Act will be applicable. Sri Rajgarhia has submitted that under s.4 of the Indian Evidence Act,1872, when one fact is decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e acquisition was for a public purpose. 79. In this case we have already held that the fair market value of the disputed property is Rs. 6,58,000 and the property has been purchased by the appellants for Rs. 1,85,009. We, therefore, hold that the fair market value of the disputed property exceeds the apparent consideration thereof by more than 25 per cent of such apparent consideration and under such circumstances, it shall be conclusive as proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer and no evidence in rebuttal of it could be adduced by the appellants that the consideration was truly stated. 80. The Competent Authority has given detailed reasons while initiating the proceedings on 31st Jan., 74 for holding that the gap between the estimated fair market value and the apparent consideration was very wide and so the presumption envisaged under s.269C(2) arose that the consideration agreed to between the parties had not been truly stated and that this was done with a view to avoiding tax liability and concealing income. This fact will be evident from a copy of the order sheet dt. 31st Jan., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating to the second set of sale deeds executed by Smt. Champa Devi and her sons an daughter and so the initiation of proceedings is bad, we have already pointed out above that Sri Vijay Kumar and his family members executed sale deeds in favour of the transferees on 30th Aug.,1973 and the sale deeds were registered on 5th Sept.,73, whereas Smt. Champa Devi and her two sons and one daughter executed the sale deeds in favour of the same transferees appellants for a lesser consideration. These sale deeds were executed on 22nd Nov., 73 and were registered on the same date. We have already given the details of those sale deeds earlier. We have also pointed out that all the transferees are the appellants before us. 83. The learned counsel for the appellants has pointed out that the first common objection dt. 2nd March, 1974 was filed by the transferors Vijay Kumar and his family member sand in this common objection it was pointed out to the Competent Authority that the title of the vendors was under dispute and Title Suit No.54 of 1962 was pending in the Court of the Addl. Subordinate Judge, Patna and it was one of the factors due to which the vendors sold the disputed property for a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferors referred was pending since 1962 and the very fact that the transferees did not mention it in the deed of sale indicated that it was of no significance. The Competent Authority held that subsequent payment of Rs. 1,01,000 claimed to have been made to the rival claimant was voluntary and reimbursable from the vendors according to the terms of the deed and that this factor about the title did not come into consideration at all at the time of registration of the deed by Sri Vijay Kumar and others and was not expected to adversely affect the price of the property. 85. The learned counsel for the appellants has filed various documents in connection with the litigation. The first document is a copy of the plaint of title Suit No. 54 of 1962 in the Court of the Subordinate Judge, First Court, Patna, which is at pages 58 to 62 of the paper book filed by the appellants. This suit was filed on the allegation that plaintiff No.1 Smt. Mahabalkumari was married to Sri Newas Ram on 21st Nov., 33 and Vijay Kumar plaintiff No.2 was born from this marriage on 12the Dec., 34. It has also been mentioned in the plaint that Sri Newas Ram died on 24th Oct., 60 leaving him surviving only pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deceased, Sri Newas Ram entitled to all his properties the suit was also for evicting the defendants from the property unlawfully occupied by them as mentioned in the plaint. The plaint was verified on 9th May, 62. 86. The learned counsel for the appellants has also filed a copy of the written statement file by the defendants which is at pages 54 to 57 of the paper book. The written statement shown that the defendants pleaded that the plaintiff No.1 Smt. Mahabalkumari was married to Sir Newas Ram and it was also admitted that Sri Newas Ram died at Patna on 24th Oct., 60, but the defendants plea was that defendant No. 1 was the legally married second wife and defendant Nos. 2 and 3 were the sons and defendant No.4 was the daughter of Sri Newas Ram and that she was entitled to the possession of the house. 87. The learned counsel for the appellants has filed a copy of the compromise petition which is at pages 64 to 68 of the paper book. According to this compromise petition which is dt. 10th April, 75 both the parties accepted that defendant No. 1 was the legally married second wife of the deceased Sri Newas Ram and defendant Nos. 2 to 4 were the legitimate children of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for appellants has submitted that the deed of agreement with Smt. Champa Devi was executed on 15th July, 73 and the sale deed by Vijay Kumar was executed on 30th Sept., 73 and the sale deed by Smt. Champa Devi was executed on 22nd Nov., 73 and the sale deeds executed by Smt. Chamapa Devi and her sons and daughter recite about the execution of the deed of agreement dt. 15th July, 73 which goes to show that the transferees knew about the disputed title of the transferor Sri Vijay Kumar before taking the sale deed from him. However, the original deed of agreement dt. 15th July, 73 has not been produced before us. Sri Rajgarhia on behalf of the Department has submitted that no reliance can be placed on the deed of agreement for sale executed by Smt. Champa Devi. He has pointed out that in view of the preliminary notice assessment dt. 29th Sept., 73 the transferees filed written objections before the Competent Authority on 1st Dec., 73 and on 26th Sept., 74. He has filed copies of the aforesaid two objections and we find that there is no mention about the execution of the deed of agreement for sale. However, we find form the objection petitions filed by Sri Kusheshwar Jha and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of the plaint, copy of the written statement, copy of the order of compromise and the copy of the compromise petition were not produced before the Competent Authority and so they are additional evidence in the appeal before the Tribunal. He has referred to r. 29 of the Income-tax (Appellate Tribunal) Rules, 1963 as amended by the Income-tax (Appellate Tribunal) Amendment Rules, 1973, which is to be found in 92 I.T.R. (Statutes) at pages 7 and 8. R. 29 as amended lays down that the parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any documents to the produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or, if the income-tax authorities have decided the case, without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them the Tribunal, for reason to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. Thus, it cannot be doubted that if the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, but, they were not so filed no special reasons have been shown why these documents were not filed at that stage. No substantial cause has been shown for admitting these documents at this stage. We cannot, therefore, admit for our consideration the plaint and the written statement by way of fresh evidence before us. As afar as the compromise was concerned, it is stated to have been arrived at on 10th April, 75 and the Court passed its orders on 10th June, 75. This was admittedly much after the Competent Authority had passed the order. We find that the appeal before the Tribunal was filed on 24th Dec., 74 and the hearing of the case started on 21st March, 75. While the hearing of the case was in progress this compromise was arrived at and recorded. The appellants in the present appeals are not a party to this compromise decree, but it was arrived at between the transferors of the property. In our opinion, it would not be reasonable or proper to admit this document as evidence at this stage as the Competent Authority had no occasion to consider the significance of these documents and its genuineness. This is certainly not a document which the Tribunal required to enable it to as or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on the ruling reported in A.I.R. 1957 Patna at page 546 where it has been held that mortgage by a member of a joint Hindu family is not void but voidable at the opinion of the other members of the family. He further submitted that the sons of late Sri Newas Ram got the properties as co-parceners and so the transfer by some of them was not a valid transfer. 96. Sri Rajgarhia in his submission has stated that the provisions of s. 43 of the Transfer of Property Act were not applicable to this case. Under that section there is a provision for feeding the grant by estoppel where a person who did not have interest at the time of transfer gets that interest later on. Sri Rajgarhia further submitted that Sri Vijay Kumar and others were not only in possession of the disputed property but were also the recognised owners as there names were mutated in the Municipal records and the Anchal Office. Under these circumstances they were Competent to transfer the property and give and exclusive possession of the same. 97. Sri Basudeo Prasad had further submitted that Sri Vijay Kumar and others had only 3/10th share in the property as was evident from the compromise and so they could only tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the learned counsel for the Department it was not for the Tribunal to go into the question of title of the property as there are Civil Courts to decide those issues. He also pointed out that Sri Vijay Kumar and others had clearly stated that they would be responsible if any defect was later on found in their title to this property. In view of this, the transferees had received the property as a whole and the transferees had clearly taken up the responsibility of any future defect in the title. He also referred to the provisions of ss. 91 and 92 of the Evidence Act and submitted that the additional evidence should not be considered. Sri. Rajgarhia also pointed out that the transferees by rushing to take the second set of sale deeds and by paying an amount of Rs. 1 lakh to Smt. Champa Devi and others have admitted the position that Rs. 1,85, 000 was not the correct market value of the property. He also pointed out that the payment made to Smt. Champa Devi and others had no relationship to their alleged interest in that property. He also pointed out that different transferees have paid different amounts considering the area of the plot. He, therefore, submitted that the second se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount paid to them was much lesser than what had been paid to Sri Vijay Kumar and others. Besides this, the separate consideration shown in respect of different transferees also does not follow any basis. For a plot of 3,368 sq. Ft., an amount of Rs. 10,000 was paid by Sri Kusheshwar Jha and Binod Kumar Mishra; whereas for a plot of 2,784 sq. Ft. Whose price was almost half of the first in the first deed Smt. Bhagwant Kaur paid Rs. 11,000. Similar discrepancies and anomalies appeared in respect of other transfers. It appears that those transfers were arrived at on and ad hoc basis either to create evidence or merely to purchase peace. They we certainly not for acquiring any specific share or interest in the property. The second set of sale deeds are silent about the interest of the transferors. Thus, the second set of sale deeds need not detain us in deciding the action taken on the basis of the first set of sale deeds. 100. Several arguments given above need not be dealt in detail as they were based on the question of additional evidence and fresh documents which have not been admitted by us. We have to proceed and consider the proceedings under s. 269C of the Income Tax Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its and cannot be called in question on the basis of those events. 101. We have also held above that the initiation of the proceedings was done after recording reasons and after calling for the objections from the parties concerned. We have also held that the printing inaccuracies in the gazette notifications did not invalidate the initiation of proceedings. The issue of notice under s. 269D prior to the actual publication of Gazette also did not create any validity in these proceedings. We have also held that the valuation of the disputed property had been rightly determined at Rs. 6,58,000 as on the date of transfer. Though this value is arrived at after considering all the relevant factors. In any case, the special factors so much relied upon by the appellants could not reduce the fair market value below Rs. 5 lakhs. The provisions of s. 269C became applicable in all cases where the difference between the fair market value of the consideration shown in the instrument of transfer is more than 15% of such apparent consideration. In the present case it is almost two and half to three times the consideration shown in the instrument. As the difference was much more then 25% it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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